Savings account
Savings account as the name itself gives a brief description it is a deposit account used by individuals, clubs, Association and other bodies such as trust Society, etc to park their money for future use
This is an interest-bearing account on which the bank pays interest to the account holder so as to encourage the habit of saving in people
The best thing about
A saving account is that the money is safe and accessible anytime and anyplace through a 24-hour ATM facility
Features of saving account
- The account holder is permitted to withdraw money on-demand on presentation of cheque or through the withdrawal form
- Next, there are certain restrictions on the number of withdrawals per month and the amount withdrawn per day
- The account holder has to maintain a minimum balance in his account otherwise, a fee or penalty is charged by the bank
- It is an interest-bearing account on which the bank pays interest on a daily basis on the outstanding balance of the account
- Lastly, banks provide a passbook or statement of account to the account holder that acts as a snapshot of the date wise debit and credit details of the transactions and the credit balances at the end of the customer’s account
Current account
The current account is an active account that remains operational all day long meaning that there is no limit on the number of transactions
During a working day in fact there is no limit on the number of withdrawals per transaction in other words the account supports frequent transactions and, so it is mainly used by firms, institutions, government, bodies, and societies
Features of current account
- A current account is a non-interest-bearing account meaning that no interest is paid by the bank to the current account holders for the amount deposited in the bank
- Banks allow overdraft facility to the account holders either for a short period or on a regular basis but to a certain limit
- Statement of account is provided by the bank to the account holder on a periodical basis to maintain
- Current account Bank often levy some charges known as ledger folio charges
- However, some banks do not charge any amount for the maintenance of the current account subject to the balance maintained in the account is enough to compensate
- Lastly, banks also provide cheques or bills collection facility to the account holder
Difference between a savings account and a current account
Savings Account
- Meaning savings account is a deposit account used by the customers to save their money for future use
- Is to encourage the habit of savings in people whereas current account aims at supporting frequent transactions while banks pay interest on the savings account on the outstanding balance in the account,
- The number and amount of withdrawals are limited in a savings account
- Next, the minimum balance to be maintained in a savings account is comparatively less than a current account
- Account details for savings account banks provide passbook or statement of accounts
Current Account
- Current account is allows its customers to perform frequent transactions meaning that it can be operated upon any number of times during a day
- No interest is paid on the current account
- Conversely, there is no limit on the number and amount of withdrawals in a current account
- Current account only a statement of accounts are provided by the bank
- Overdraft facility is provided for the current account only
When it comes to the opening balance
The opening balance required for a savings account is comparatively less than a current account
Lastly when it comes to suitability savings account is best for individuals and households
The current account is best for businessman and company
